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Saturday, June 30, 2012

The Great Thing About America, Hate Almost Always Loses in the Long Run

For reason totally
inexplicable to the rest of us, there is a group of American that hate,
positively despise people who are gay or lesbians. Many have made it their mission in life to actively
torment and persecute gay and lesbian couples.
Some want to jail people for homosexual activity, and they have at least
a couple of Supreme Court Justices who think this is okay, Justices who voted to
uphold a Texas
law making homosexual conduct a crime.

But the haters are losing. We know this because corporate America is now moving to the side of equality. The latest is the Oreo cookie, whose symbolic re-depiction of an Oreo (no you cannot buy one that looks like this) shows a support for Gay Pride. Oreo is just one of a number of high profile companies
joining the list of those consumer product seller who want their customers to
know that unlike some people, they are not bigots.

The LGBT community may
be small, but it and its backers are vocal, often rallying support for
companies deemed to be on their side and organizing boycotts against others (cough, cough, Target ).

Companies are even
competing to have the most creative gay-friendly internal policies, according toa February report from the Economist. American
Express has a “pride network” with more than 1,000 members; Cisco offers LGBT
workers a bonus to make up for an irregularity in the U.S. tax code.

Overt (but not covert) racism has been largely removed from America life
and condemned by almost everyone. But
there are still small pockets of racists left.
That is the future of attitudes towards gay and lesbian couples. There
will never be 100% acceptance, but the haters will at some time in the near future be just a small group of
disreputable people, and will be largely ignored. And everyone will wonder what the big fuss
was all about.

Can a Thousand Years Plus of Conflict Be Ending in
Anglo-Irish Relations

As has been
frequently noted in this Forum, many of the world’s problems lie in some of
the smallest areas. In the Middle East,
it is the small nation of Israel
and the Palestinian people that are the source of a conflict that could
threaten the world’s energy supplies and even lead to a nuclear war. Taiwan
is a very small nation island, yet its relationship with China can be a
potential regional conflict. The nation
of Cuba has caused problems
in its relationship with the United
States far in excess of its importance in
world affairs.

This same thing can
be said of the issue of Northern Ireland
and Britain. The world has been shocked for decades by the
level of violence and hatred in the relationship, and in particular in the loss
of life, many of them innocent by-standers.
The hatred between the two parties is deep and historical, covering millennia. So it is amazing that an event happened
recently that was unthinkable by almost everyone.

The Queen publicly
shook hands with the former IRA commander and current Sinn Fein politician
Martin McGuinness today, in a move that has seen British-Irish relations take a
momentous step forward.

The historic encounter
would have been unthinkable just 10 years ago, but the ongoing success of the
peace process and the Queen’s conciliatory words and gestures during a visit to
the Republic of Ireland last year paved the way for the
meeting.

There have been many
so-called ‘breakthroughs’ in the attempt to gain peace in Northern Ireland,
but it now appears that the recent ones are real. If so, it is an example of how even the most
vicious conflicts can give way to a satisfactory peace when the welfare of
people and not politicians and government officials comes first.

The New York Times
has an admirable goal. It wants to
balance its editorial pages with commentary from intelligent and thoughtful
Conservatives. The problem, finding
intelligent and thoughtful Conservatives.

The most recent
effort of the Times has been a gentleman named David Brooks. Here is Mr.
Brooks writing on health insurance policy.

Mr. Brooks - Funny, He
Looks Smart

Liberals tend to argue
that major structural changes can be made within the framework of Obamacare.
Republicans tend to believe that the perverse incentives can only be corrected
if we repeal Obamacare and move to a defined-benefit plan — if we get rid of the
employer tax credit and give people subsidies to select their own plans within
regulated markets.

Personally, I think
the Republicans’ defined-contribution approach is compelling. It’s a
potentially effective way to expand coverage while aligning incentives so that
people make cost-conscious, responsible decisions. But the truth is neither I
nor anybody else really knows what works. We’re going to have to go through a
process of discovery. We’re going to have to ride the period of rapid
innovation that is now under way.

Let’s leave aside the
contradiction that in the first paragraph Mr. Brooks calls the Republican
plan a “defined benefit plan” and in the second paragraph it is a “defined
contribution plan”, and attribute that to just sloppiness (a crime this Forum
is also frequently guilty of). Let’s
also leave aside the fact that defined contribution and defined benefit plans
are really terms for retirement plans and not health insurance plans. We will even let slide the idea that
Republicans want “regulated” markets when in fact it is unregulated markets
that Republicans are pursuing.
Regulation is an anathema to them.

But notice how Mr.
Brooks talks about getting rid of the “employer tax credit”. While there are tax credits in the ACA for
small businesses, what we really have today is an employer tax deduction for
the employer’s portion of the cost of providing health insurance. Even H & R Block rookies know the
difference between tax credits and tax deductions. Apparently Mr. Brooks does not.

The Conservative
mantra in this case and most others, “it doesn’t matter; facts don’t
matter; only our ideology matters and it is right no matter what the facts”.

The state of
excessive executive compensation, particularly when the executive that is
the subject of discussion has performed poorly is such that it is now
considered news when said executive’s excessive compensation is reduced. Such is the case when the executives at
Barclays Bank will have to go without their bonuses this year. Here
is the why.

Barclays has been slapped with total fines of £290m for its
"serious, widespread" role in manipulating the price of crucial
interest rates in a move that has forced chief executive Bob Diamond and other
top executives to forgo any bonuses for 2012.

The £59.5m fine from
the Financial Services Authority is the largest penalty ever levied by the City
regulator, which found that Barclays contravened its rules for a number of
years and involved "a significant number of employees".

The other penalties paid by Barclays are to settle with the
US authorities, the department of justice ($200m) and the Commodities
Futures Trading Commission ($160m), as part of an industry wide probe into the way that interest rates traded
between banks were set.

Of course these fines all sounds like a lot of money,
and it is for normal people but it is really chump change for a large financial
institution. In fact, most of the
companies look upon fines like this as just another cost of doing business. Cheat a little, make a lot of money and if
you get caught and have to pay a fine, well, that just cuts into the profits by
a small amount.

The really big news
is that the management team at Barclays is actually going to have to give
up some compensation. Of course the CEO
also made the obligatory “we are gong to be a better corporate citizen”
statement too.

Diamond,
who has been pledging to make Barclays a better corporate citizen, is giving up
his bonus for 2012 as a result.

"The
events which gave rise to today's resolutions relate to past actions which fell
well short of the standards to which Barclays aspires in the conduct of its
business. When we identified those issues, we took prompt action to fix them
and co-operated extensively and proactively with the authorities," Diamond
said.

"Nothing
is more important to me than having a strong culture at Barclays; I am sorry
that some people acted in a manner not consistent with our culture and values."

Now in normal places people who do bad things in a
company lose their jobs. But at banks
the rules are different. The crime is
not breaking the rules, it is getting caught.
And the punishment is not getting fired, it is making a few million less for a year.

And of course we do have the statement of a contrite
CEO. That should count for something. And if this happens again maybe the
executives will have to stay in their rooms after work and not go out to play for a week.

They Have Concluded It’s Much Easier and Cheaper to Simply
Buy Rather Than Take

A major fear of
Conservatives, one no doubted pushed by those who would benefit from even
more U. S. spending on
defense is that this country must build a strong military to protect us against
China. After all, China
could put a couple of million soldiers on ships and take a two week cruise
across the Pacific and invade PismoBeach. Yes it could happen.

Of course the reason
it won’t happen (aside from being a complete fantasy) is that China can do
very much better by just using its vast dollar currency reserves (that they
earned by selling us the junk one finds in dollar stores) to buy what it wants
in the United States. Case in point, Chinese
investment in major housing projects.

Lennar Corp., one
of the U.S.'s largest home builders, is in talks with the China Development
Bank for approximately $1.7 billion in capital to jump-start two long-delayed
San Francisco projects that would transform two former naval bases into
large-scale housing developments, according to people familiar with the
discussions.

The negotiations
aren't final and the financing arrangement could still fall through. But if
completed, the deal would reflect a changing dynamic between the U.S. and
Chinese economies, as an American company turns to China for help funding a
long-delayed and partially publicly funded project that otherwise wouldn't get
done.

Of course, until now the Chinese have concentrated
primarily on the developing part of the planet.

In
recent years, Chinese state money—in large part provided by CDB and its
counterpart the Export-Import Bank of China—has
been pivotal in funding major infrastructure and resource projects around the
world, but the bulk of that activity has been in developing countries in
Africa, South America and Asia.

But maybe this means that the United States
is looking more like a developing rather than a developed nation.

With
Chinese firms increasingly eyeing opportunities in the U.S. and other developed markets, CDB will
likely find itself being approached to fund more deals in the U.S. People familiar with the
negotiations said CDB was using the Treasure Island and Hunters Point
projects—which both include "green" building and affordable housing
components that are of interest to Chinese builders—as a test case to become
familiar with what's required for doing such deals in the U.S.

But that’s ok. If
Republicans succeed in adopting the austerity programs they so want to do,
with massive cuts in government spending and the fiction of stimulating the
economy by massive cuts in taxes for the wealthy the U. S. will look more and more like
a developing nation. And China may then feel they have a moral imperative
to send aid to the U. S.

And No She is Not a Liar, She is a ___________________ (fill in the blank yourself)

Unable to fight the
compulsion to be in the public light, Sarah Palin has
emerged from wherever she is living these days to once again charge that
the health care act of the Obama Administration provided for ‘Death Panel’, a
board of people who would make decisions about whether or not people will live
or die.

'I was called a liar for calling it like it is,' Palin writes. | AP Photo

Three years after Sarah Palin boiled
up the rage in the health care debate with “death panel” remarks, the former
GOP vice presidential candidate is proudly sticking by her claim in a Facebook post Monday afternoon.

Palin charged in a
August 2009 Facebook post that the Democrats’ health
care bill would empower a “death panel” of government bureaucrats who
can decide who lives or dies. The 2009 claim earned Palin Politifact’s “Lie of
the Year,” but she said today that the president’s health care law’s
Independent Payment Advisory Board makes life-or-death decisions.

“It was a pretty long post, but a lot of
people seem to have only read two words of it: ‘death panel,’” Palin wrote
today. “Though I was called a liar for calling it like it is, many of these accusers
finally saw that Obamacare did in fact create a panel of faceless bureaucrats
who have the power to make life and death decisions about health care funding.”

While this Forum is
loathe to defend Ms. Palin, it finds it must do so. Although we know of no major main stream political
person who has called Ms. Palin a liar for her claim of ‘Death Panels” (Ms.
Palin must always, always play the victim card, she must have a full deck of
them) it is clear that she is not a liar on this subject.

To be a liar Ms.
Palin must know that what she is saying is not true, and it should be clear
to everyone that Ms. Palin actually believes what she is saying, and thus is
not a liar and should not be labeled as such.
However since what she is saying is not true, never was true and cannot be
true, then what she should be called is ‘delusional’ or ‘confused’ or ‘ignorant’
or ‘uninformed’ or . . . well you get
the idea. Just pick your favorite term.

Ms. Palin must be living in fear of a Romney victory. If that happens she will find that she has absolutely no press coverage, that no one will be paying any attention to anything she says and that Mr. Romney will be running as far away from Ms. Palin as he can. Really, a Romney win is Ms. Palin's worst nightmare.

Thursday, June 28, 2012

After the Supreme Court has rendered its august (?) opinion on the legal status of the health care reform act, this Forum will do the obvious and issue no comments. Why? Because every other Forum, every commentator and every news outlet will issue their comments. In short, there is nothing The Dismal Political Economist can say that will not have already been said.

But the good news is that this Forum will publish on July 4th. Since the really good commentators are expected to take the day off, this Forum will fill the need for snarky, sarcastic comments on the current state of politics and economics on a day when others will not meet that need. It's the least we can do, and the authors on this Forum believe in doing the least they can do.

Generally speaking
bonds issued by state and local governments come in two flavors. General Obligation or GO bonds are back by
the full faith and credit of the governmental unit, and are the obligations of
the taxpayers. Revenue Bonds are issued
to support specific projects, and are backed by the revenues (and assets) from those
projects, hence the name. The attractive
part of Revenue Bonds is that the taxpayers are not on the hook for the
obligations.

But it turns out many
local governments and state governments have put taxpayers on the hook for
Revenue Bonds, and, oh yes, forgotten
to mention it to the voters.

Surprised local
taxpayers from Stockton, Calif.,
to Scranton, Pa., are finding themselves obligated for
parking garages, hockey arenas and other enterprises that can no longer pay
their debts.

Officials have signed
them up unknowingly to backstop the bonds of independent authorities, the special
bodies of government that run projects like toll roads and power plants.

In all but a few situations this does not really matter,
because the project can support the debt.
But when the project cannot support the debt, uh oh.

With
many cities now preoccupied with other crushing costs — pension obligations,
retiree health care, accumulated unpaid bills — a sudden call to honor a
long-forgotten bond guarantee can be a bolt from the blue, precipitating a
crisis. The obligations mostly lurk in the dark. State laws requiring voter
pre-approval of bonds don’t generally apply to guarantees. Local governments
typically don’t include them in their own financial statements or set aside
reserves to honor them.

Case in point is Scranton,
Pa. where the city at first
refused to honor its guarantees.

Scranton’s version of a debt crisis began when a local parking
authority said it couldn’t make a bond payment coming due in June, calling on
the city’s guarantee. The authority had issued bonds in 2004, 2006 and 2007 to
finance parking garages that the city had used in a campaign to woo Hilton
Hotels and Resorts to operate a conference center downtown.

Each
time the authority issued more bonds, the city backed them with a powerful
“full faith and credit” guarantee. But by 2008 the authority had $54 million in
bonds outstanding, and was spending about 60 percent of its budget on debt
service — so much that it could not cut parking rates to compete with private
companies that set up cheaper parking lots nearby.

A
majority on the City Council refused to honor the guarantee, saying the
authority’s finances were in disarray and they wanted to strike a blow for
fiscal rectitude.

That did not turn out well.

Suddenly,
Scranton, which
has been in dire fiscal straits for years, was a pariah. Only one bank had been
willing to help it raise money, and it backed out of a $16 million deal to
provide short-term financing. Without that cash, the mayor said Scranton couldn’t make
its next payroll. The city’s fuel supplier threatened to halt deliveries of
gasoline, which would idle the police cars and garbage trucks. More than a
dozen other vendors cut off the city’s credit.

A
bond insurer, Radian Asset Assurance, started a 30-day countdown to foreclosure
on the authority’s parking garages. The trustee for the bondholders, Bank of New York Mellon, warned
that it would get a court-ordered tax increase.

Taken
aback, the mayor and City Council changed course, saying Scranton would pay the parking authority’s
debts after all. But the damage was done. The initial decision to not make the
$1 million bond payment had tainted Scranton’s
credit on all of its debts for the foreseeable future.

A large part of this is taxpayer’s fault. No it is not their fault that they were not
told or warned of the off the books guarantees, it is their fault because they
voted for craven politicians who promised near unlimited government services and
projects with no tax increases.

And Gov. Robert McDonnell is Still a Wimp – But May Have Cravenly
Saved His VP Chances

Earlier this Forum
has commented
on the huge controversy at the University of Virginia. Acting almost unilaterally, the Rector (Head)
of the Board of Visitors (Trustees) Helen Dragas moved to force the resignation
of UVa President Teresa Sullivan. The resulting uproar has now resulting in the
Board
unanimously rescinding the resignation, and Ms. Sullivan and Ms. Dragas
marched arm in arm into the meeting of the Board where Ms. Sullivan was
retained as President.

All in all it seems the
episode has had a fitting conclusion, or at least about the best that one could
hope for.

Sullivan, the woman at
the center of the conflict, was not scheduled to attend Tuesday’s meeting, and
her chair had been removed from the board table. Then, at the last minute, it
was added back, and Dragas walked into the meeting with Sullivan.

t was a moment rich in
symbolism: the conflict of the past two weeks pitted Dragas, the university’s
first female rector, against Sullivan, its first female president. Dragas led
the campaign to remove Sullivan and has spent the past days justifying the
action by critiquing the Sullivan presidency.

The Governor of
Virginia, Republican Robert McDonnell is the only one left who continues to
look weak, foolish and indecisive. Governor
McDonnell, who has near absolute power over the Board of Visitors took the
position of taking no position. He
reiterated that position, in a desperate attempt to remain outside the
controversy and not damage his political fortunes.

Earlier
Tuesday, Gov.
Robert F. McDonnell(R) said he had not advised the 15-member panel how to
vote at the special meeting and would support the group whatever it decides.

“I’m
not instructing them how to vote and what to do. I think it would be absolutely
inappropriate,’’ McDonnell said on his monthly call-in show on WTOP radio. “I
want this to be done. My goal is to have finality, but I trust these excellent
people on the board to make the right decision.’’

Note that this
abdication of responsibility and leadership would normally be damaging to
one’s political aspirations, but remember Gov. McDonnell is trying to the Vice
Presidential nominee on a Mitt Romney ticket.
Given Mr. Romney’s total lack of leadership on things like immigration,
where he refuses to answer even basic questions on the recent Supreme Court
decision on Arizona’s
laws, or on Mr. Obama’s policy of not pursuing young people brought to the
country when the were very young Mr. McDonnell may well have demonstrated that
he is the perfect fit for Mitt.

Yep, a
non-committing, non-leadership, ineffective Governor of a swing state who
will do and say nothing to damage the race by taking a stand on anything, just what
the Romney camp ordered.

The response in
Europe to the Great Recession was to focus on deficit reduction by
implementing a policy of somewhat higher taxes and large cuts in government
spending. The expectation was that by
reducing deficits businesses and consumers would have the confidence they
needed to increase spending and investment, and lo and behold economic
prosperity would return. How’s that
working out, this headline in the WSJ answers that question.

Business activity in the euro zone
contracted sharply in June, a closely watched survey showed, underscoring the
currency bloc's deepening economic malaise as it confronts an escalating debt
crisis along its southern fringe.

Don’t like those details, here are some others.

Things were better than expected in the
first quarter…but [orders] seemed to stop in the last two or three
months," with weakness extending from Europe's weak periphery to
faster-growing emerging markets such as China, said Ralph Wiechers, chief
economist at VDMA, Germany's engineering association. "We are very
cautious about the next few months."

Still unhappy, how about this?

Germany's
PMI, which includes both manufacturing and services, slid 0.8 point to 48.5,
suggesting the economy will struggle to grow this quarter. Manufacturing
activity slid deeper into contraction, with that index falling below 45. A
particular concern: New export business fell at its fastest pace in more than
three years. France's PMI also remained below 50, at 46.7.

Germany,
and to a certain extentFrance
are Europe’s economic engines. When the engines slow the trains has a lot of
trouble increasing speed.

Thursday's PMI report
only included details for France
and Germany;
other countries will report their June results in early July. But debt-saddled
countries such as Portugal
and Spain
are showing no signs of stabilization after several quarters of contraction.

"April and May
were the most difficult months we ever had," said José Gonçalves, owner of
specialty elastics maker JPC Elasticos SA in Portugal's textile region. He has
received some cancellation orders from clients in Spain, a key export market. Last
month, Mr. Goncalves laid off 22 workers, bringing his workforce down to 34
employees.

The European policy
of austerity is largely to blame here, as are the European leaders. Okay, they took the chance on austerity,
hoping that it would work. That produces
some criticism, but now that it is clear the policy is not working continuation
of a failed policy merits extreme criticism.
That is what European leaders deserve and that is what they are going to
get. History will not be kind.

Wednesday, June 27, 2012

No, Not a Real Interview, But a Real Interview Would Have
Gone This Way

The campaign of Mitt
Romney to be President is becoming somewhat of a joke, although the joke
will be on everybody else if Mr. Romney is elected. The latest farce is Mr. Romney’s refusal to
say or comment on anything with respect to immigration. He refused to comment on President Obama’s
policy of not persecuting and prosecuting young people brought to the country
illegally, and he refuses to comment on the Supreme Court decision to overturn
much of Arizona’s
immigration law. Here is an example of the exchange between a reporter and Romney's spokesperson.

QUESTION: Does (Romney) support the law as it was drafted in Arizona?

GORKA: "The governor supports the right of states, that's all we're going to say on this issue."

Since Mr. Romney will
not accept or answer questions on this or many other topics, The Dismal
Political Economist feels he has an obligation to present what the interview on
the subject of immigration might look like were Mr. Romney to submit to questions.

Do you
think an 18 year old who was brought to this country at the age of 3 and
just now graduated high school should be arrested and sent back to her
native country?

Romney: I think you
know my position on that issue.

Uh no,
we don’t, that why we are asking the question.

Romney: I believe I
have been perfectly clear as to what I believe.

Well,
could you clarify your position for us?

Romney: If you look
to my past statements I think you will find the answer.

That’s
the problem, we have looked at your past statements and they seem to be in
conflict with your current position.

Romney: I haven’t
changed my feelings on the subject, I have been consistently inconsitent, something no one else in the campaign can claim. I don’t think it is necessary to rehash
what I have already said, besides did I mention Mr. Obama does not know how to
create jobs and I do.

If you
become President will you overturn Mr. Obama’s directives on immigration?

Romney: As President
I would have the authority to do so.

Yes,
we know that, but the question is would you do so?

Romney: I will review the situation carefully and if I determine
that prior policy was not appropriate I may reverse it or I may leave it in
place. That’s what a President who is a
leader does. Just because I determine
that actions by Mr. Obama were wrong doesn’t mean I should change them. Did I mention I know how to create jobs?

The
Supreme Court decision still allows Arizona
officers to ask for proof of legal residency when they stop someone, do
you think this is correct?

Romney: If I am
stopped, and I hope I am, particularly if I have that dog strapped to the top
of the car then I will have no trouble with the officers. Look, my name is Mitt Romney, that’s not an
Hispanic name? So obviously I am in the
country legally. If Hispanic people don’t want to
be harassed by the police they should change their names to Mitt Romney.

But
doesn’t demanding to see someone’s ‘papers’ smack of the old East German
Stasi tactics?

Romney: Look as long
as we are not emulating the French I don’t think it’s important if we are doing
what the former East Germany
did.. If I am elected every policy I
support and implement will be “French tested” and if there is anything “French”
about it then it will not be done. I don’t
think its fair to compare the fine people of old East Germany with today’s
French. Obama’s policy is too French
with respect to immigration, mine won’t be.

Rational and normal
people were all horrified once they learned the true characteristics of
former Alaska Governor Sarah Palin after she was chosen by Sen. John McCain to
be his running mate in the 2008 Presidential election. Senator McCain continues to be roundly
condemned for the choice, and all the more so since he continues to say (too
great laughter) that she was the best choice out there and that she was prepared
to be President.

As it turns out America owes a measure of thanks to
Sen. McCain for this choice. By exposing
Ms. Palin to the scrutiny of the public, he exposed once and for all the total
lack of experience and intellect Ms. Palin possessed, and spared the United States
from a Palin attempt at higher office later in this decade. Had Mr. McCain not chosen Ms. Palin, she
likely would have finished her term as Governor, to no fanfare but with no
major criticism and then entered the national stage untested and unknown. This might have allowed her far greater
success in public life than what she actually accomplished, serving two and a
half years of a very lightly populated state.

So thanks Mr. McCain, for saving us from having Ms. Palin
regarded as a serious candidate for national office.

The fight over
abortion and reproductive rights is largely ending without the Supreme
Court doing anything. States that
opposes basic rights of women to control their own bodies have enacted
legislation that all but completely removes access to abortion services. In Mississippi
restrictions imposed by the state may mean the end to any abortion clinic in
the state. In Kansas, where a doctor who provided late
term abortion to serve the health of the mother was murdered officials have
taken away the license of a physician who referred patients to that doctor.

Before the Supreme Court decision in Roe. V. Wade the law of
the land was that abortion rights were determined at the state level. Roe made the right to access to abortion a national
right.

When the Supreme Court ultimately overturns Roe it won’t
change things all that much. States that oppose abortion rights will have
already enacted provisions that denied those rights anyway. Other states like California
and New York
will have strong provisions for reproduction rights. This will then lead to a battle to have the
Supreme Court declare any right to abortion is Unconstitutional.

It is getting pretty
repetitive talking about the problems of Europe, how Germany is imposing
austerity on the rest of the continent, how this is self-defeating, how it is
even bad for the German economy which is export driven. A lot of people, Paul Krugman for example,
have pointed out that a large part of the policy is not driven by economics, it
is driven by a desire to ‘punish’ profligate nations for not being neat and
thrifty and, well, for not being Germans.

The leader of this
sect is the German Finance minister Wolfgang Schnaeuble. He seems to be dedicated to
single handedly disrupting any form of comity and communications and
coordination between the wealthy German state and those who need European aid.

Mr. Schaeuble - Is This the German Finance Minister or
that Mean Banker Guy from It's a Wonderful Life?

Mr Schaeuble told Bild
am Sonntag in unusually blunt language that Greece has forfeited much of
Europe's trust during the sovereign debt crisis, as reflected in an opinion
poll covering the euro zone's four biggest nations and published in the paper.

Now let’s see, the Greek people just voted against
those who would abrogate the agreements made with European entities to provide Greece the
funds it needs in return for devastating the Greek economy, and the Finance
Minister attacks the new government. How
exactly is that supposed to help?

Greece’s
new government needs some political support, it needs to amend the bailout
package so that the economy has a chance to not fail as fast as it is currently
failing. Politics and economics require amending
the punishing terms to give Greece
at least a tiny chance of surviving.

Domestic politics is
playing a role here, as aiding the rest of Europe is not popular in those
nations of Europe that are not suffering as much as Greece, Italy, Spain and
Portugal.

The
poll of 4,000 people in Germany,
France, Spain and Italy
showed 78pc of Germans and 65pc of French people wanted Greece to leave the euro zone, with 51pc in Spain and 49pc in Italy also backing a Greek exit.

But based on past and current statement, it is easy to
conclude that politics is only part of the motivation of Mr. Schnaeuble. A far more motivating factor would seem to be
that he is just plain mean.

Tuesday, June 26, 2012

And No, It Doesn’t Suggest Teaching the Biblical Creation
Story in Place of Real Science

Sorry Conservatives

As a result of the
recent controversy over the dismissal of the President of the University of Virginia by the Board of Visitors a member
of the faculty writing in the Washington Post has directed us to the minutes of what appear
to be the first formal meeting of the Board of Visitors of that eminent
institution of higher learning. The
minutes were written by Thomas Jefferson.
For those who argue that this nation was set out by the Founding Fathers
to be a Christian nation, there is this rebuttal by the Founding Father
himself.

In
conformity with the principles of our Constitution, which places all sects of
religion on an equal footing, with the jealousies of the different sects in
guarding that equality from encroachment and surprise, and with the sentiments
of the Legislature in favor of freedom of religion, manifested on former
occasions, we have proposed no professor of divinity; and the rather as the
proofs of the being of a God, the creator, preserver, and supreme ruler of the
universe, the author of all the relations of morality, and of the laws and
obligations these infer, will be within the province of the professor of
ethics; to which adding the developments of these moral obligations, of those
in which all sects agree, with a knowledge of the languages, Hebrew, Greek, and
Latin, a basis will be formed common to all sects. Proceeding thus far without
offence to the Constitution, we have thought it proper at this point to leave
every sect to provide, as they think fittest, the means of further instruction
in their own peculiar tenets.

Does this mean that those who argue that the separation of church
and state was never ever envisioned by those who set forth the principles that
govern the United States
are completely wrong? Does it mean that those who promote the use of tax dollars to promote religion, religious education and to send children to religious private schools are in violation of the spirit of America. Yes, it does.

Along with faux
turkey, the kind where ground up
turkey meat and turkey like substances are pushed together to form a ‘roll’ of
turkey that is then sliced and sold as turkey, the Defined Benefit Pension Plan
will rank as one of the 20th century’s worst ideas. No maybe its not as bad as what they did to
turkey, but it is close.

State and local
governments over the past decades have promised a fixed income in
retirement to their employees. These
governmental units set aside sums in pension plans to provide the
benefits. Obviously it is impossible to
know how much to set aside. Just as
obviously governmental officials wanting to keep taxes low will not set aside
enough.

Now the Government
Accounting Standards Board, the people that set out the rules for
accounting for such things like pension costs
are going to implement new rules.
The result, in some aspects pension accounting will move away from the
fiction side of the ledger.

The new rules could
hit pension plans in states like Illinois and New Jersey particularly
hard, and even raise borrowing costs for certain municipalities, analysts say.
"This could be the event that incites a bigger policy response than what
we've seen so far," says Matt Fabian, managing director at Municipal
Market Advisors, a research firm.

The exact impact of
the new rules by the Governmental Accounting Standards Board isn't clear.
According to researchers at BostonCollege, pension
liabilities at 126 state and municipal pension plans would jump by roughly $600
billion, or about 18%. The estimate is based on 2010 financial data and doesn't
reflect the stock market's recent rebound or moves by many U.S. states to rein in pension
costs.

Now none of this is new. Anyone who has been following this topics has
know that these pension plans are woefully underfunded, and that they rely on
totally unrealistic assumptions, like that their investments will earn 8% per
year. What is new is there is finally
going to be some official recognition of the problem. Not that it will make any difference.

Some
pension officials said they don't plan to make drastic changes based on GASB's
decision. For example, many pension officials plan on using two sets of numbers
when calculating pension obligations: one for official reporting purposes and
another to determine taxpayers' pension bills. GASB's new rules would allow
that.

"It's
an accounting change; that is all it is,'' says Andrew Pratt, a spokesman for
New Jersey Treasurer's office. "New
Jersey still has complete control over how the
assumptions in its pension plans are set."

Yes, you are reading that correctly. Pension officials will just keep two sets of
books, a real set and a fictitious set.
The only amazing thing here is that they are so willing to admit this up
front.

Living off the $174,000 Congressional Salary Must be Just
Too Difficult for Nevada Republican Rep. Joe Heck

The Republican party
and some, but certainly not all Republicans are severely skeptical of the
benefits of unemployment compensation.
They think that paying people to be unemployed encourages unemployment,
that people on unemployment insurance just sit around enjoying the benefits and
turning down work.

So it must certainly
come as a surprise that the spouse of Nevada Republican Congressman Joe
Heck is now collecting unemployment benefits.
Here
is some of the background.

(Mrs.) Heck worked for
Specialized Medical Operations, where Joe Heck was president, according to
financial disclosure forms filed with the House. The company, according to the
congressman’s biography, was “dedicated to providing quality medical training,
consulting and operational support to law enforcement, [emergency medical
services] and military special operations.”

On Dec. 22, 2010,
shortly before Heck was sworn into the House, the corporation was dissolved,
according to records filed with the Nevada
secretary of state’s office.

And in 2011, Heck’s
company closed. He began earning $174,000 as a member of Congress. Lisa Heck was
out of a job and started receiving unemployment benefits.

Now Congressman Heck is not the hypocrite you might
think he is, he generally support unemployment compensation and insurance.

Joe
Heck has mostly voted for extending unemployment benefits. He opposed a
two-month extension of unemployment benefits and the payroll tax holiday — as
did many other Republicans.

But Mr. Heck is receiving a fantastic salary, great benefits and has a
job that is far better than the average American. One would think Ms. Heck could learn to live off of
$174,000 a year.

He Thinks the Supreme Court in General and Justice Scalia in
Particular Should Act as Both the President and the Congress

The Supreme Court has
just ruled on whether or not the state of Arizona
may essentially withdraw from the United States as far as immigration
is concerned and enact its own policy regardless of the fact that Federal law
pre-empts state law in this situation.
It has ruled, to a great extent that it may not. The law that Mitt Romney called ‘model’ for
the United States
is invalid.

In his dissent
Justice Scalia reveals
that he thinks he is the arbiter not of the laws but of governmental
policy. He brings a totally irrelevant
issue into the debate, and issue that was not then and is not now part of the
case. He can do that because he is
answerable to no one, not even the law.
His issue is with the President’s recent policy to acknowledge that law
enforcement resources are insufficient to track down and deport every illegal
immigrant, and so law enforcement will concentrate on the dangerous and criminal
illegals, and leave those who were brought to this country as children and have
led exemplary lives, alone.

You know, ‘Scalia’,
that’s a funny sounding name. Don’t
we all wonder if maybe Scalia is the name of an illegal immigrant? Wouldn’t it be right under Arizona’s
now defunct law for Arizona police to stop
Justice Scalia, demand to see his ‘papers’ and make him prove he is a U. S.
citizen? If anyone ever wonders what it
would take for their to be unequivocal proof that a higher Deity rules the
world, certainly the arrest of Justice Scalia for sounding and looking foreign
and having a foreign name would meet
that criteria.

Must Arizona’s ability
to protect its borders yield to the reality that Congress has provided
inadequate funding for federal enforcement—or, even worse, to the Executive’s
unwise targeting of that funding?

Really, what possible justification does this Justice
have for passing judgment on executive law enforcement policy when that policy
is totally outside of the issues in the decision? (Courts can only consider
what is brought before them, but that is a legal technicality the Justice seems
to be unaware of.) But Justice Scalia goes even further, he asserts that he
knows better than the elected officials and the appointed law enforcement
officials of how to best and most effectively spend public money.

The
husbanding of scarce enforcement resources can hardly be the justification for
this, since the considerable administrative cost of conducting as many as 1.4
million background checks, and ruling on the biennial requests for dispensation
that the nonenforcement program envisions, will necessarily be deducted from
immigration enforcement. The President said at a news conference that the new
program is “the right thing to do” in light of Congress’s failure to pass the
Administration’s proposed revision of the Immigration Act. 7 Perhaps
it is, though Arizona
may not think so. But to say, as the Court does, that Arizona contradicts
federal law by enforcing applications of the Immigration Act that the President
declines to enforce boggles the mind.

No Justice Scalia, what boggles the mind is the level
of arrogance that you have accumulated over the years, arrogance that manifests
itself in trying to write your own personal political opinions into law. It seems almost impossible that any attorney,
much less one that has actually been a judge should be so ignorant of the role
of courts in the U. S.
legal and Constitutional framework. But
it must be possible, for we have Justice Scalia as living proof that such ignorance can exist.

History will not be kind to Justice Scalia, the
indictment coming from the Justice and his own writings.

For Conservatives the Rights of Corporations Have Priority
Over All Others

When the Supreme
Court decided in Citizens United v. Federal Election Commission that
corporations had almost unlimited rights to spend for political campaigns,
despite a long history of regulation of corporate spending in political
campaigns, many people predicted the case would unleash a flood of uncontrolled
corporate spending. The supporters of
the law, indeed the Court itself pooh-paahed this thought. How did things turn out?

Now the Court has
just decided whether or not the state of Montana, and by implication, all other
states may regulate corporate campaign spending in state and local races. Montana
has had a long history of abuse by corporations involving politics and so the
state had justifiable reasons for regulating corporate spending. But the Supreme Court has said no,
corporations have the right of free and unlimited spending.

Of note here is Justice Breyer’s eloquent
dissent. In a very short statement he
obliterated the legal arguments of the majority, and while he does not say so,
it is clear that the majority has ruled not on the basis of law, but on the
basis of their own political beliefs, that corporations are people my friend
and have the same rights as people. Here
is some of what Justice Breyer said.

Moreover,
even if I were to accept Citizens United, this Court’s legal conclusion should
not bar the Montana Supreme Court’s finding, made on the record before it, that
independent expenditures by corporations did in fact lead to corruption or the
appearance of corruption in Montana. Given the history and political landscape
in Montana,
that court concluded that the State had a compelling interest in limiting
independent expenditures by corporations. 2011 MT 328, ¶¶ 36–37, 363 Mont. 220, 235–236, 271
P. 3d 1, 36–37. Thus, Montana’s experience, like considerable experience
elsewhere since the Court’s decision in Citizens United, casts grave doubt on
the Court’s supposition that independent expenditures do not corrupt or appear
to do so.

The decision here was
not unexpected. For the Conservatives
on the Court to support Montana’s
right to regulate corporations, a right states have had for over a century
would have meant the Court would have had to recognize its own folly in the
Citizens United case. No Conservative
will ever, ever admit that he or she was wrong.

As for the position that Conservatives have about the supremacy of states' rights, well when that philosophy gets in the way of what they really want, which is for the Federal government to enact rules and regulations and laws which they prefer then states' rights be damned.

Next Week Same People Release Study Showing
People with More Money are Richer than People with Less Money

For reasons somewhat
too complicated to be explained here, the state of Oregon several years allowed some low income
citizens not normally eligible to enroll in Medicaid to do so. The right
to enroll was determined by a lottery so some low income people got Medicaid, and some similar people did not. As a result the state provides
a substantial amount of reliable data on the impact of having health
insurance for a relatively homogenous population.

For those who cannot
read the entire results of the study, here one startling conclusion.

In a continuing study, an
all-star group of researchers following Ms. Parris and tens of thousands of
other Oregonians has found that gaining insurance makes people healthier,
happier and more financially stable.

Wow, is that amazing.
People who have health insurance are healthier than the same type of
people who don’t have health insurance.
Someone alert the Nobel committee.

One bit of real news is that people that have insurance do
tend to spend more of their own and the insurance money on health care.

“The
study put to rest two incorrect arguments that persisted because of an absence
of evidence,” said Katherine Baicker, a Harvard economist who worked on the
study and served as an economic adviser to President George W. Bush.

“The
first is that Medicaid doesn’t do anything for people, because it’s bad
insurance or because the uninsured have other ways of getting care,” Ms.
Baicker said. “The second is that Medicaid coverage saves money” by increasing
preventive care, for instance.

“It’s
up to society to determine whether it’s worth the cost,” she added.

But this should not
have been unexpected. Once a person
has access to health care they are going to upgrade the quality of their
health, and that means spending more money, both of their own and of the
insurance program.

As for the question of whether or not it is worth the cost,
does a modern, advanced nation with the largest and most prosperous economy in
the world really have to ask the question of whether or not it can afford
health care for everyone? If there is
any doubt, here is a story that might settle the issue.

Ms.
Kious, 24, who also suffers from depression and Crohn’s
disease, an inflammatory bowel condition, makes only $1,000 to $1,200 a
month and cannot afford insurance. The clinic performed some tests and
prescribed Ms. Kious the pills. But they also told her that she had Stage 2 cervical
cancer. As of now, the condition remains untreated. She and her boyfriend
even considered getting pregnant so that she would automatically qualify for
Medicaid.

“It’s
scary for me, having cancer and
knowing I can’t do anything about it,” said Ms. Kious, her hair in an elaborate
plait. “It’s an I-don’t-know-when-my-next-meal-will-be sort of thing. It’s
really difficult because health problems make you scared and emotional.”

Think about it, that in the United States of America in 2012
there is a question as to whether or not a woman can get treatment for cervical
cancer, or be allowed to die.

Only a few people
know of Alan Turing and even less know of the tragic circumstances of his
life. Here
is what he did.

In 1936, when he was a
student at Cambridge,
he attended a lecture in which M.H.A. “Max” Newman characterized an old and
thorny logic problem as a matter of finding a “mechanical process” for testing
the validity of a mathematical assertion. Turing took the phrase “mechanical
process” at face value and wrote a paper in which he laid out the architecture
of a hypothetical machine to do the testing — what became known as the “Turing
machine.” The paper, intended for specialists, amounted to a blueprint for the
modern computer, a “universal machine” that could do the work of an infinity of
single-use machines.

Okay, so he invented
the machine that has ultimately lead to the ability to play Angry Birds on
a smart phone. Uh, no, he developed a
machine that while it may not have been solely responsible for winning World
War II, it was instrumental in saving huge amounts of lives and heavily
contributed to the winning of that war.

During
World War II, Turing was among a group of thinkers summoned by the British
government to Bletchley Park to help crack the seemingly airtight German Enigma
code. Because the code was generated by a machine, Turing decided, only a
machine could break it. He went on to design and help build that machine — the
“Bombe,” without which the Allies might have lost the war — thereby instigating
a huge leap forward in the field of cryptanalysis.

And here is how he was treated after that momentous
accomplishment.

He
made little effort to disguise or efface his desire for other men, and when, in
the early 1950s, he embarked on a businesslike affair with a youth in Manchester, his sense of
how the world should be clashed with how it was.

Suspecting
his boyfriend of robbery, he summoned the police to his house. They ended up
arresting Turing under the “blackmailer’s charter,” which criminalized “acts of
gross indecency” between adult men in public or in private. It was under this
law — not repealed until 1967 — that Oscar Wilde had been sentenced to hard
labor in prison.

Yes, he was arrested for being gay. And no, the result of that arrest is not
pleasant reading.

To
avoid a similar fate, Turing agreed to submit to a course of estrogen therapy
intended to cure him of his homosexuality; as a result, he grew breasts and
became impotent. Yet even after the treatment ended, the police, fearing that
he might defect to the Soviet Union, stayed on
his trail, interrupting every effort he made to live life as he saw fit. In
June 1954, Turing committed suicide by biting into an apple laced with cyanide
— a nod to his favorite film, Walt Disney’s “Snow White and the Seven Dwarves.”

The fate of Mr. Turing of course is wonderful news to
those who fear and hate and loathe gay and lesbians, and want to punish them, but it is
grossly appalling to the rest of us, a reminder that humanity is not yet
completely human.

When Winston
Churchill spoke of the Battle of Britain and talked about how so many owed
so much to so few, he was not thinking of Alan Turing. But Mr. Turing is surely ensconced in that
group of “so few”.

A small gesture to atone to posthumously to Mr.
Turning met this fate.

In
February, the Liberal Democrat Lord Sharkey introduced the possibility of a
pardon in the House of Lords, only to have his proposal
rebuffed by Lord McNally, the justice minister. McNally argued that Turing
“was properly convicted of what at the time was a criminal offence. He would
have known that his offence was against the law and that he would be
prosecuted. It is tragic that Alan Turing was convicted of an offence which now
seems both cruel and absurd — particularly poignant given his outstanding
contribution to the war effort. However, the law at the time required a
prosecution.”

Strange, it seems that in England which is the source
of the English language some people high up in government do not understand
that the ‘justice minister’ is involved with ‘justice’, or even understand what the term ‘justice’
means. We don’t know who Lord McNally
is, and hope we never know, never encounter the man and that this miserable
excuse for a person soon leaves the public life in Britain. It is people like Lord McNally whose opportunity to hold high positions of prestige and to be a 'Lord of the Realm' that are the result of efforts like Mr.
Turing to defeat the Nazi’s in World War II who be should be asking Mr. Turing
to pardon them.

For the rest of us, we can only say this. Happy
Birthday Alan. And we’re sorry.

And Other Short Comments on the News Because It’s Too Hot
for Long Comments

Following a meeting
of the G-20 countries, European leaders are meeting
again in Rome to deal, once again, and again and again, with the European
economic crisis.

Germany's Angela
Merkel, Francois Hollande of France, Spanish Prime Minister Mariano Rajoy and
host Mario Monti of Italy
will get together to push for consensus to give momentum to a crucial summit of
European Union leaders in Brussels
on June 28 and 29.

Monti has warned of severe consequences for the 17 countries that use the euro
and the world economy if next week's summit fails.

No, if that summit fails Europe
can always take up the problems at the next summit, probably scheduled for four
days later.

Europe – stop meeting and
start doing.

Moody’s has just
issued a down grade in the credit ratings for major banks all around the
world. In a related development Moody’s
said that it was concerned that a cow could kick over a lantern and start a
fire that would severely damage Chicago.

The International
Monetary Fund has warned that the plan to save Spanish banks by infusing
$125 billion of new capital
might not be a workable plan. The
IMF severely criticized the plan because it funnels funds through the Spanish
government, making it and not the banks liable for the funding. An IMF official later said that Spain needs
help from some international finance agency, but then retracted that statement
after the official realized that is what the IMF is.

The
package is expected to reduce future government spending by roughly $24 billion
over 10 years compared with what would have been spent if current policies were
extended.

In Washington
this is what passes for fiscal restraint and causes celebration. Of course the largest component of the
program is SNAP, what used to be known as Food Stamps. The Senate did make a major reform by
disqualifying big lottery winners from getting Food Stamps. In Washington
this is what passes for fiscal restraint and causes celebration.

There is a new movie
out this past week, Abraham Lincoln, Vampire Hunter. Really, there is, we are not clever enough to
make that kind of stuff up. A Washington
Post review says that it is both “terribly silly and a lot of fun. “ Well, we are going to have to take his word
on that.